A brief thought about non-jobs

In the comments to my previous offering, Mr Dan asked whether I could specify what I mean by a "non-job". One of the points I put was that the public sector should shed "non-jobs", but I did not explain what I meant by "non-jobs"; so here goes.

In the real world jobs exist because they achieve something. A small factory has people who seek orders for their products, people who actually make the products, people who pack the products, people who deal with the paperwork, people who deal with the business's tax affairs, cleaners, tea-makers and goodness only knows how many others. All of those jobs can exist only for so long as the result of their combined efforts is a profitable business. Mrs Darjeeling the tea-lady never goes anywhere near the machines, but she is a necessary part of the team because British workers need cups of tea.

What you don't find in small factories is people being employed unless their work is thought to contribute to the overall effectiveness of the business. For example, they don't employ a Five-a-Day Outreach Advisor to give readings on the virtues of broccoli in the canteen at lunchtime. Nor do they employ five people in the accounts office when the work can be done by four. Nor do they pay for design consultants to create a new corporate logo unless they see a clear need to do so. The reason none of these items of expenditure is incurred is that it would add unnecessary costs to the business; the additional costs would be unnecessary because any benefit they might deliver would be less than the cost. The managers of each business must decide on its own priorities and exercise their judgment, I believe the trendy jargon is that they undertake a cost-benefit analysis. Sometimes they will be right, sometimes they will be wrong. If they are wrong too often or by too big a margin, the whole business will be at risk.

What amounts to a non-job in the public sector depends on how you define the proper role of the public sector and how you measure the benefit. In the private sector it's relatively easy because you can measure costs in pounds and receipts in pounds and deduce that a surplus of the former over the latter means something has to change. In the public sector it is not so easy because the perceived benefit of a particular item of expenditure might be political rather than economic, in which case there will always be room for debate whether it is justified.

My idea of a public sector non-job is necessarily affected by my view of the proper role of the State. For example, I see no good reason for the State to tell people what to eat. We all receive quite enough information on that subject throughout our lives from parents, teachers, friends, spouses, television and radio that there is no need for a single penny of tax to be spent on the matter. Exit Healthy Eating Initative Facilitators and Five-a-Day Counsellors, non-jobs of the first water.

Then there is wholly pointless and unnecessary bureaucracy. Perhaps the best example comes with so-called regional government. We have Regional Assemblies, whatever they might be, and many a regional quango with specific non-resonsibility for housing and planning. They do nothing that cannot be done, and is not done, by central and local government. Prime candidates for the out-tray.

From there we can move to the cost of governmental megalomania and distrust. These unfortunate and inappropriate qualities manifest themselves most obviously in the setting and monitoring of targets. Targets for schools, targets for the police, targets for hospitals, targets for local authorities, targets for everyone other than government ministers. Targets are set because our current government wants to be in control, because it wants to be seen to be in control and because it does not trust those who actually have to provide services to the public to exercise their own judgment in how best to use the resources allocated to them. Legions of paper-pushers are engaged in disseminating the targets and monitoring whether they have been met. To my mind they are non-jobs because the whole process is flawed. Give each regional police force its budget for the year, give each state school its budget for the year, do the same for each local health authority (or whatever they are now called) and each local authority and let them use the money as they see fit. There is plenty of free local monitoring of the efficiency of these local service providers. That is not to say they will always use the money to best advantage, but meeting arbitrary targets won't do that either. So out go the targeting paper-pushers, they do non-jobs.

These are just a few examples, but I hope they give a taste for what I mean by non-jobs. Essentially they fall into two categories - jobs that should not exist because they do things the government should not be involved with and jobs that exist because government gets more involved than in needs to in areas in which it has some legitimate role. These jobs do not "add value" as the saying goes. All they do is suck up money.

Tackling poverty, part two

My first suggestion for tackling poverty was to increase the income tax threshold to such a level that no one has to pay until they are not just above the poverty level but substantially above the poverty level. The minimum wage means that all those in full-time employment are necessarily above that level and those who work part-time only need to work about 21 hours a week to be avoid poverty. Today I want to look at the position of the unemployed. What can government do to ensure they are not in poverty? Again I use the definition of financial poverty I gave a few days ago - being unable to pay for housing, heating, water, food and clothes.

There are, of course, some people who are unemployed but not in any financial difficulty because they have savings, but for most this is not the case. Government's role, in my opinion, is two-fold. First a subsistence level of benefits should be paid to ensure they do not starve. Benefit activists moan constantly about the amount paid being too low to allow people to live but I have seen no evidence of anyone starving to death because they have not been paid enough to buy food. They might not be able to buy flat screen televisions, computers, Axminster carpets, foreign holidays and cars but it is not the job of government to take tax from people who struggle to buy such luxuries from their wages in order to allow those not working to receive them.

Government's second role is to interfere in the world of business as little as possible. Whether business can employ everyone in the country is a moot point, what is plain fact is that increasing the administrative costs of the productive sector reduces the number of people that sector employs. Whether it be a requirement to undertake equality audits, an obligation to pay for lengthy maternity and paternity leave, the need to comply with petty health and safety regulations or any of the other hundreds of things business has to do to dance to government's political tune, it all costs money. Increases in the costs of any business must result in (i) reduced profits, (ii) other costs being reduced or (iii) increased prices. They cannot have any other effect because money does not grow on trees and businesses cannot magically create money to pay for overheads imposed by government. In all but the most exceptional circumstances, reduced profits result in a business being less attractive to investors thereby putting at risk expansion and, in many cases, making refinancing of existing debts more expensive. Similarly, increasing prices is something a business will seek to avoid because of the obvious risk to sales. That leaves cutting other costs as the first port of call and shedding non-essential staff is often the only sensible choice to make.

Those who suffer most when businesses have to cut staff to pay for bureaucratic overheads are those whose work can most easily be done by others or dispensed with altogether. That tends to be those of fewest skills, the very people who find it most difficult to find work and who, therefore, are most likely to have no cushion of savings to prevent them falling into poverty. It is no answer for government to say they will pay subsistence benefits, there is no benefit in benefits, those people want to work for a living and would be able to if it were not for government piling unnecessary costs onto business.

Regulation makes it more difficult for the unemployed to find work. My second suggestion for tackling poverty is, therefore, for government interference in business through regulation to be reduced to only that which is essential to protect against the greatest dangers. Most health and safety regulations are completely unnecessary because the risk they seek to eliminate is minimal and the cost of implementing them is vastly disproportionate. Equality and diversity targets serve no purpose at all - any employer who rejects the best candidates on the ground of race, sex, sexual proclivity or age ends up with an inferior workforce and should be left to stew in his own narrow-minded juice. In fact I am unable to think of any red tape which is of net benefit to business. It might result in some nice lists of statistics for government to manipulate as it chooses but it achieves nothing other than to increase costs and put at risk the jobs of the lowest paid.

It was not very long ago that vast numbers of wholly unskilled people were employed in small businesses even though they served little useful purpose, it happened because throughout the country there are small businesses based in villages and small towns and those businesses wanted to be seen to be part of the community. If there was a young person fresh out of school or an older person who had lost his job it was a common occurrence to find a broom and a brown overcoat being made available for them so they could be employed at a low wage to sweep the floors and empty the bins. All it took was a quiet word with a sensible owner who knew it was better to create a job and bear the modest additional cost rather than refuse, it kept the existing workforce happy because they wanted to see poor Johnny in work and it cemented relations with the village. Be in no doubt, that happens still, but not as much as it used to. Margins are trimmed by expensive red tape and the obligation to pay Johnny the statutory minimum wage makes him too expensive for many.

I have attempted to explain why I believe unnecessary regulation hits the unskilled in two ways, they are often the first to be laid-off to cut costs and many of those who would be hired voluntarily become too expensive. The real problem is that these effects do not stand alone, there are already plenty of unskilled people without jobs. Any step taken by government which increases their number makes it all the more difficult for a single one of them to find work and raise themselves above the poverty line by their own efforts.